Savell v. Hayward

Decision Date27 February 2015
Docket NumberDocket No.: BCD-CV-14-34
CourtMaine Superior Court

DAVID L. SAVELL, Plaintiff

Docket No.: BCD-CV-14-34

Superior Court of Maine

February 27, 2015


Cumberland, ss


Location: Portland


This matter is before the court on Plaintiff David L. Savell's Motion for Summary Judgment in his favor on Count IX of his Third Amended Complaint. Count IX alleges that Defendants Michael A. Duddy and his law firm Kelly, Remmel & Zimmerman (collectively "Attorney Defendants") committed attorney malpractice and breached their duty owed to the Plaintiff.

Attorney Defendants have opposed Plaintiff's motion, and have also filed a cross motion for summary judgment as to all four counts pleaded against them in Plaintiff's Third Amended Complaint: Counts VI, VII, VIII, and IX. Defendants contend that the Plaintiff has failed to establish facts on these claims that would entitle him to judgment.

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Factual Background

This suit arises out of Plaintiff's relationship with two corporate entities. The first is Sunbury Primary Care, P.A. ("SPC"). SPC was a medical practice serving members of the public and is comprised of three doctor shareholders ("Doctor Members"). (Pl.'s Supp. S.M.F ¶¶ 2-3; Defs.' Opp. S.M.F. ¶¶ 2-3.) At all relevant times, Plaintiff served as the chief executive officer of SPC. (Pl.'s Supp. S.M.F. ¶ 5; Defs.' Opp. S.M.F. ¶ 5.) The second entity is Sunbury Medical Properties, LLC ("SMP"). The only business of SMP has been the ownership and management of real property in Bangor, Maine where the medical business was located. (Pl.'s Supp. S.M.F. ¶ 11; Defs.' Opp. S.M.F. ¶ 11.) At all relevant times Plaintiff served as manager of SMP. In 2008, the Members of SMP voted to sell the Plaintiff an equal ownership Economic Interest in SMP for $5,200. (Pl.'s Supp. S.M.F. ¶ 16; Defs.' Opp. S.M.F. ¶ 16.) The Economic Interest provided the Plaintiff with a one-fourth interest in SMP and made him a one-fourth guarantor on debts owed to Key Bank.1 (Pl.'s Supp. S.M.F. ¶ 17; Defs.' Opp. S.M.F. ¶ 17.)

From early February to mid-August 2013, the two entities negotiated with Eastern Maine Medical Center ("EMMC") for the sale of SPC's assets and for the sale of the real estate owned by SMP.2 (Pl.'s Supp. S.M.F. ¶ 20; Defs.' Opp. S.M.F. ¶ 20.) On or about August 12, 2013, the shareholders of SPC and the members of SMP reached a tentative agreement for the sales of both companies for $4.6 million. The allocation of the sale price was $1 million for the sale of SPC's assets and $3.6 million for the real estate owned by SMP. (Pl.'s Supp. S.M.F. ¶

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22; Defs.' Opp. S.M.F. ¶ 22.) On August 14, 2013, SPC and SMP sent a letter of acceptance of the tentative agreement. (Pl.'s Supp. S.M.F. ¶ 23; Defs.' Opp. S.M.F. ¶ 23.)

Going forward, SPC and SMP were represented by Defendant Duddy and his law firm Kelly, Remmel & Zimmerman. EMMC was represented by counsel from Eaton Peabody.3 (Pl.'s S.M.F. ¶ 25.)

By mid-August, 2013, Plaintiff served as attorney Duddy's primary contact person for attorney Duddy's communications with SPC and SMP concerning the sales to EMMC. (Pl.'s Supp. S.M.F. ¶ 27; Defs.' Opp. S.M.F. ¶ 27.) On or about September 13, 2013, the Asset Purchase Agreement was signed by the parties. (Pl.'s Supp. S.M.F. ¶ 31; Defs.' Opp. S.M.F. ¶ 31.) Defendant Bruehl signed the Agreement on behalf of SPC in his capacity as Chair of SPC and Plaintiff signed in his capacity as Manager of SMP. The Doctor Members signed in their individual capacities as "physician owners." (Pl.'s Supp. S.M.F. ¶ 32; Defs.' Opp. S.M.F. ¶ 32.)

On September 27, 2013, Eaton Peabody informed Duddy that EMMC had determined that there were too many risks to proceed with the transaction as it was. As a result, the Agreement was amended. EMMC agreed to purchase the property for $3.95 million and sought to bifurcate the asset sale. Further, the sale price of SPC's assets was subject to reduction in the asset purchase price prior to closing and the net proceeds of SMP's real estate sale were to be held in escrow by Eaton Peabody to be used to satisfy any debts and liabilities associated with the asset closing. (Pl.'s Supp. S.M.F. ¶ 38; Defs.' Opp. S.M.F. ¶ 38.)

After closing on the sale of real estate by SMP on October 1, 2013, Eaton Peabody paid additional amounts from the escrow account to cover SPC pensions and payroll. (Pl.'s Supp. S.M.F ¶ 48; Defs.' Opp. S.M.F. ¶ 48.) After said payments, the balance remaining in the

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escrow account as of October 24, 2013, was $387,530.20. (Pl.'s Supp. S.M.F. ¶ 49; Defs.' Opp. S.M.F. ¶ 249)

On October 9, 2013, Plaintiff sent an email to Attorney Duddy and noted that he wanted his money, the sum of $187,402 paid directly to him, leaving only $216,154 to cover SPC debts. (Pl.'s Supp. S.M.F. ¶ 50; Defs.' Opp. S.M.F. ¶ 50.) Plaintiff continued to repeatedly email Duddy concerning his share of the escrowed proceeds.4 (Pl.'s Supp. S.M.F. ¶ 51; Defs.' Opp. S.M.F. ¶ 51.) For example, on October 14, 2013, Plaintiff contacted Duddy and requested his money before the end of business on Friday October 18, 2013. (Pl.'s Supp. S.M.F. ¶ 52; Defs.' Opp. S.M.F. ¶ 52.) Attorney Duddy responded to Plaintiff on October 14, 2013, indicating that he was out of the office, but would call the Plaintiff the next day. (Pl.'s Supp. S.M.F ¶ 53; Defs.' Opp. S.M.F. ¶ 53.) On the same day at 4:23 p.m., Duddy sent the doctors copies of one or more of Plaintiff's emails in which Plaintiff had requested the payment of his money. The email stated: "Gentlemen, please see the below email exchange with David. I need to talk with you about the arrangements you have made with David, and how you want to handle his expectation." (Pl.'s Supp. S.M.F ¶ 54; Defs.' Opp. S.M.F. ¶ 54.)

On October 21 and 22, 2013, Eaton Peabody told Duddy that EMMC would not close on the sale of assets by SPC unless the purchase was reduced to an amount sufficient only to pay SPC's then current liabilities, estimated to be about $400,000. EMMC indicated that if an

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appraisal revealed that the assets had a value less than $400,000 it would not purchase SPC assets.

Thereafter, on October 24, 2013, Plaintiff signed an authorization on behalf of SMP allowing Eaton Peabody to apply $372,774.16 of its funds held in escrow to satisfy amounts due or owed by SPC at the asset closing.5 Said authorization was emailed to Attorney Duddy for review less than two hours before the closing. (Pl.'s Supp. S.M.F ¶ 62; Defs.' Opp. S.M.F. ¶ 62.) Plaintiff also signed the Second Amendment to the Asset purchase Agreement. Eaton Peabody sent the final draft of the Second Amendment to Duddy during the closing. (Pl.'s Supp. S.M.F. ¶ 63; Defs.' Opp. S.M.F. ¶ 63.)

At the time of closing on the sale of assets by SPC on October 24, 2013, SPC owed $759,223.56, including interest and legal fees, to Katahdin Trust Company on a promissory note and Line of Credit. (Pl.'s Supp. S.M.F. ¶ 68; Defs.' Opp. S.M.F. ¶ 68.) The Doctor Members were personal guarantors of both. (Pl.'s Supp. S.M.F. ¶ 69; Defs.' Opp. S.M.F. ¶ 69.) The funds available from the sale of assets were not sufficient to pay the debts owed to Katahdin Trust Company, and the escrowed SMP sales proceeds were applied to satisfy that debt. (Pl.'s Supp. S.M.F. ¶ 70; Defs.' Opp. S.M.F. ¶ 70.) As a result, Plaintiff has received no distribution or other financial benefit from the sale of real estate by SMP, except that his liability as a one-fourth co-guarantor, with the Doctor Members, on SMP's debt to KeyBank has been extinguished. (Pl.'s Supp. S.M.F. ¶ 75.)

Throughout November of 2013, Plaintiff contacted Duddy on a series of occasions. On November 4, 2013, Plaintiff sent Duddy an email listing various necessary accounting entries to be made in the companies' books, among the entries to be made was an unspecified amount owed to Plaintiff by SMP. (Pl.'s Supp. S.M.F. ¶ 80; Defs.' Opp. S.M.F. ¶ 80.) After an email

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exchange concerning business accounting, Attorney Duddy responded to the Plaintiff: "Yes, let's continue with the close out stuff, and we'll ultimately get to your situation." (Pl.'s Supp. S.M.F ¶ 81; Defs.' Opp. S.M.F. ¶ 81.)

Plaintiff contends that the Attorney Defendants were representing his interests, and had a fiduciary duty to address the Plaintiff's claims and to inform the Plaintiff of the LLC's actions adverse to the Plaintiff's interests. The Attorney Defendants contend that no attorney-client relationship was established between the Plaintiff and the Defendants, and therefore that they owed the Plaintiff no duty for purposes of the professional malpractice claim in Count IX of the Third Amended Complaint. They also contend that they made no misrepresentations or committed tortious interference for purposes of Counts VI, VII and VIII of the Third Amended Complaint.

Standard Of Review

M.R. Civ. P. 56(c) instructs that summary judgment is warranted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any . . . show that there is no genuine issue as to any material fact set forth in those statements and that any party is entitled to a judgment as a matter of law." To survive a motion for summary judgment, the opposing party must produce evidence that, if produced at trial, would be sufficient to resist a motion for a judgment as a matter of law. Rodrigue v. Rodrigue, 1997 ME 99, ¶ 8, 694 A.2d 924. For purposes of summary judgment, "[a] material fact is one that can affect the outcome of the suit." Burdzel v. Sobus, 2000 ME 84, ¶ 6, 750 A.2d 573 (citing Kenny v. Dep't of Human Services, 1999 ME 158, ¶ 3, 740 A.2d 560); see also McIlroy v. Gibson's Apple Orchard, 2012 ME 59, ¶ 7, 43 A.3d 948. A genuine issue exists when sufficient evidence supports a factual contest to require a...

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